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Dollar rises, euro drops as Draghi lacks details
By V. Phani Kumar, MarketWatch
SAN FRANCISCO (MarketWatch) — The U.S. dollar Thursday turned higher and the euro shed gains as European Central Bank President Mario Draghi failed to detail last week’s pledge to do whatever it takes to support the euro.

The ICE dollar index (NYE:DXY) , which measures the greenback against a basket of six major global currencies, rose to 83.233 from 82.545 just before the press conference started at approximately 8:30 a.m. Eastern, and up from 83.07 in North America late on Wednesday.

Click to Play Fed gives stronger signals of actionThe Fed signaled more strongly it will take action as needed to boost the economy but held back from immediately starting a new round of bond buying or taking other steps.

The WSJ dollar index (WSJ:XX:BUXX) , which gauges the greenback’s moves against some of the other heavily traded currencies, rose to 72.04 from 71.74 on Wednesday.

The euro (ICAPC:EURUSD) was changing hands at $1.221, down from $1.233 ahead of the news conference, and $1.223 late Wednesday.

The euro had lost ground Wednesday after the Federal Reserve kept its low interest rate unchanged, and decided not to take any action.

Draghi said no countries in the euro zone had asked for support from the European Financial Stability Facility and there wasn’t ground to take action. But he suggested the ECB could buy bonds from euro-zone countries whose yields had spiked, and that bailout funds should be ready to intervene in bond markets.

The ECB and Bank of England both left key interest rates unchanged at their respective policy meetings.

Scope for disappointment
A report in a German newspaper had suggested the ECB was mulling a two-pronged bond-buying plan with the European Stability Mechanism, which helped shore up the euro and European stocks. ECB weiging two-pronged bond-buying plan: report

But analysts said scope for disappointment was large.

“Expectations for aggressive policy moves from the ECB were certainly elevated, but given the stance of the Germans over the last couple of days, some of the fast money has exited risk assets, as traders come to terms that inaction by Mario Draghi and his team will cause a sharp sell down in equities, commodities and risk forex,” said Chris Weston, an institutional dealer at IG Markets.

Societe Generale, meanwhile, found in a survey of clients that 69% of those polled thought the ECB would disappoint after its meeting Thursday. Among those surveyed, 50% of the banks, 68% of the hedge funds, 71% of asset managers and all corporate clients had said they the ECB wouldn’t meet expectations.

Among other major currency pairs, the dollar (ICAPC:USDJPY) was trading at ¥78.20 against the Japanese unit, compared with ¥78.43 seen late the prior session.

The British pound (ICAPC:GBPUSD) was changing hands for $1.556 from $1.5552, while the Australian dollar (ICAPC:AUDUSD) was buying $1.049, compared with $1.046.